TMI Blog2012 (10) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case and in law, ld AO has legally erred in proposing and the Hon'ble Dispute Resolution Panel (DRP) has further erred in confirming/upholding the addition of ₹ 3,40,76,521 being the amount of Service tax to the total revenue for the computation of profit under section 44B of the Income tax Act, 1961('the Act'). 3. As it can be seen from the ground of appeal raised by the assessee, the only grievance of the assessee is that service tax amounting to ₹ 3,40,76,521 should not be considered as revenue while computing profit u/s.44B of the Act. 4. It was submitted that this issue is directly covered by various decisions of the Tribunal, copies of which have been filed in paper book before us. The decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total turnover for the purpose of computing deduction under section 80 HHC. It was observed by the Hon'ble Court that since no excise duty and sales tax were leviable in respect of exports, therefore, while calculating the deduction under section 80HHC by the formula - Profits of business x Export turnover Total turnover It would not be proper to include the sales tax and excise duty in the total turnover, because there cannot be any element of and excise duty. In our view, this principle is equally applicable to the service tax also. Again the Hon'ble Uttarakhand High Court in the case of Schlumberger Asia Service Ltd (supra) wherein, the question was whether the amount of customs duty paid was includible in the total turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total receipts for determining the presumptive income and in this manner the order of DRP was set aside and AO was directed not to include the amount of service tax in the total receipts for determining the income under section 44BB. 8. Respectfully following the aforementioned decision of the co-ordinate bench of the Tribunal in the case of Islamic Republic of Iran Shipping Lines(supra), which has considered the decision relied upon by ld D.R., we decide this issue in favour of assessee. It may also be mentioned that later on Delhi ITAT vide its decision dated 29.6.2012 in the case of Sedco Forex International Drilling Inc (supra) has admitted the position that service tax is a statutory liability which does not involve any element o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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